Warren Buffett Participate in a "Selfie" Taken by CNBC's Becky Quick in Omaha
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Bill Gates, Charlie Munger and Warren Buffett participate in a "selfie" taken by CNBC's Becky Quick in Omaha. In this live interview, Buffett says that based on his experiences with college students who visit Omaha, selfies are "all the rage." This is an unofficial transcript of Warren Buffett, Charlie Munger and Bill Gates appearing live with Becky Quick on CNBC’s “Squawk Box,” Monday, May 5, 2014. BECKY QUICK, CNBC: We are live this morning from the Nebraska Furniture Mart, which is one of many Berkshire businesses. Warren, this business in particular, really sees a huge surge of business on the shareholders weekend. What kind of numbers have come through here and how many shareholders do you think were actually here this weekend? WARREN BUFFETT, BERKSHIRE HATHAWAY CHAIRMAN & CEO: We'll do over $40 million in one week here at the Furniture Mart. That's a lot of business. Most furniture stores don't do that in a year, and it's our biggest week of the year. In fact, it's a normal month. We do about $450 million a year at this store. So it's a normal month, and we do it all in a week. And the stockholders get more excited every year. I mean, I run into people in the elevator a month or two ahead of time. They say thank you for holding the meeting, patting me on the back. They want to come on to the Furniture Mart. CNBC SQUAWK BOX TRANSCRIPT: Monday, May 05, 2014 PAGE 1 OF 46 BECKY: So you told us before you expected maybe 38,000 people this year. What do you think the numbers were? BUFFETT: Not any less than that. This was the biggest meeting by quite a margin because we filled not only the main auditorium, but we filled all three overflow rooms and spilled over to the Hilton, and there were people in the exhibition hall. We can never get a perfect count, but I'm sure we beat anything in the past by at least 3,000. And I wouldn't be surprised if we beat it by 5,000. BECKY: So somewhere between 38 and 40,000 is what you're guessing? BUFFETT: Yes. BECKY: Let's talk a little bit about what Joe was mentioning. I had not seen the ten-year (U.S. note yield) yet this morning. He talked about how it was 2.75 percent. Why do you think this is? Is this a sign of concern about what's happening? What would be your guess? BUFFETT: I don't know. I'm not good on interest rates. One thing I know ten years from now they probably won't be at 2.57 or 3.57. BECKY: Does it catch your attention, though, when you see the ten-year continue to decline? Most people thought it would definitely would have to go up this year. BUFFETT: It's surprising, but I'm used to getting surprised in markets. And we issue bonds from time to time. So lower rates are, the more we like to issue them, and the longer we like to issue them. BECKY: So would a ten-year at this level change any of your behavior in the business? Would you do anything differently? BUFFETT: No, if it moved up or 50 basis points or down 50 basis points, we would not do anything differently. We don't react to macro factors at Berkshire. Our macro factor is the country will do better over time. That guides us in everything we do. BECKY: If you had to make a guess right now, would you guess that the ten-year would end the year above or below the 3 percent? BUFFETT: I don't think about that. If you told me I had to pick a figure, I would pick higher. BECKY: Let's talk about one of the issues that came up repeatedly at the shareholders meeting, actually it only came up a couple times, but I did get a CNBC SQUAWK BOX TRANSCRIPT: Monday, May 05, 2014 PAGE 2 OF 46 lot of questions related to it in my email box where shareholders were sending things in. That's Coca-Cola. Joe (Kernen) already alluded to that this morning. And let's talk about what has happened. I know we've had a lot to say, but there was some criticism. Some people who didn't understand why if you thought Coca-Cola's equity plan was excessive, you didn't say something before the vote and you didn't take your 9.1 percent of the outstanding shares and vote no. BUFFETT: Yeah. We had no desire, never will have a desire to go to war with Coca-Cola. It's a wonderful company, it's treated us wonderfully, the management has always been totally candid with us. I think we've got the right leader. I'm sure we've got the right leader, Muhtar Kent, but we did think the program was excessive. With those two beliefs we felt the best thing to do was express our opinions privately to the management who listened carefully and to abstain from voting at this meeting. And we think — I know we'll have some very constructive discussions with Coca-Cola between now and when they implement any plan. BECKY: Barron's out over the weekend, there was an article in the back of it from Carl Icahn. I know you're friends with Carl and you're both on the Giving Pledge together, but this article says why Buffet is wrong on Coke. He's got a different style than you do. BUFFETT: I hope so. BECKY: Do you think — first of all, what do you think about what Carl said, and second of all, do you think that your style will be effective in this situation? BUFFETT: I do think our styles will be effective. And I think our style actually will be more effective than the style that might be proposed by Carl. But Carl moves in other types of businesses and he goes in where — often, at least, he goes in where there's a problem. There isn't a problem at Coca- Cola. There was a plan that was proposed that was excessive. It's very easy to make it non-excessive. All you have to do is spread the authorization over more years than the four years they talked about having it in the proxy. And that's easy to do. Whether it actually turns out to be excessive will depend on the actions they take subsequent to this. They have not locked it in stone that they're going to use the stockholder four years. I would say generally or frequently, at least, Carl is working with managements with different attitudes, and they probably have a different attitude toward him than Coke has towards me. BECKY: Have you spoken with Muhtar Kent to this point? When we talked to you Thursday you had not. CNBC SQUAWK BOX TRANSCRIPT: Monday, May 05, 2014 PAGE 3 OF 46 BUFFETT: I have not talked to him since the meeting. BECKY: Since the Coca-Cola meeting. BUFFETT: Since Coca-Cola's meeting, which was on the 23rd. BECKY: One other pointed question that came from shareholders this weekend — and I got several iterations of this, too, in my inbox — your son, Howard Buffet, is on the board. He voted in favor of this plan and there were some people who questioned. Howard is expected to be the chairman when you step away from the company to be the protector of the culture there. Does this raise any questions or should shareholders have questions about his ability to protect the culture when he voted for a plan that you, yourself, didn't like? BUFFETT: Yeah. I voted for plans over the years — I've on the board for 55 years. I voted for plans I didn't like. I actually voted for acquisitions I didn't like. I opposed a few too, but there's only so many bullets you can use in the gun. If you start objecting to this and this and this, pretty soon people don't pay any attention to you. You want to save your bullets for when they really count. And I have never seen a comp committee come into a boardroom, in all my time, and hundreds of times, I've never seen them come in with a recommendation and heard a no vote. The board delegates to a committee. They say you go out and work on this. They may say to the Governor's committee, you go out and work on getting directors, all kinds of things. And once a board has delegated to a committee and they've spent hours working on something, and then they report it and there's 20 other items on the agenda and the Chairman calls on the comp committee to give his report and gives it in about 30 seconds, it never gets voted against. And it would be regarded as sort of usurping the power of the committee to all of a sudden say I've got a better idea. I haven't talked to the compensation consultants, I haven't looked at the figures, but I still have a better idea. It doesn't happen. BECKY: A lot of people have been stunned by your comments on corporate governance. I don't think stunned by what you've said, but that you said it.